Fix It Again, Tony! Or Sergio.
No, not in the case of repairing Fiat cars, but in helping to bring Chrysler back from the brink.
got his chance last week to pitch his proposal of a Fiat-Chrysler alliance to the Obama administration, imparting four important words to DC politicos: We can add value.
Big Meeting With DC Brass
According to the Detroit Free Press, Marchionne’s 2 1/2 hour meeting with the Treasury Department’s automotive panel (who holds the purse strings for Chrysler and GM) was Fiat’s chance to convince the feds that his company was “the one” to help rescue Chrysler. Marchionne explained that value is “…the real issue and it’s a necessary ingredient of the revival of Chrysler.”
Chrysler still wants federal financial assistance as it pursues its alliance with Fiat. A major part of that deal has Fiat providing Chrysler with a wide swath of fuel-efficient small and medium cars, two particularly weak areas for the company. In addition, Chrysler would gain access to a number of foreign markets via Fiat.
Chrysler Goes Foreign…Again!
Fiat would gain a 35% share in Chrysler without having to pay a penny. That arrangement has some politicians concerned because it would once again shift Chrysler’s control into foreign hands. Coupled with Daimler AG’s 19.9% share, foreign automakers would control 54.9% of Chrysler. The remaining 45.1% belongs to Cerberus minus the federal government’s stake in the business.
Marchionne has been seeking to gain entrance in the US market for Fiat and Alfa Romeo, two brands that were at one time sold in North America. Maserati and Ferrari have a presence here, while Lancia doesn’t. The popular Fiat 500 would most likely be one of several Fiat models sold here, possibly under the Dodge umbrella.
Last year, Marchionne said that he foresaw the day when just six car companies would be large enough to survive for the long haul, each needing to produce a minimum of 5.5 million units annually in order to be profitable.
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